Click & collect update (April 2016)

Click & collect has become a prominent fixture for many multichannel retailers – in-store as well as using third-party lockers – and shopper awareness of it as a fulfilment option is high.

If we look at how this translates to actual usage in the IMRG Capgemini Quarterly Benchmark, the share of total orders completed using click & collect for multichannel retailers has reached the following percentages over recent years:

% Click & collect sales

2011

8.8%

2012

13.7%

2013

15.2%

2014

17.8%

2015

22.5%

During 2013 and 2014 the penetration rate increased by 2.5 percentage points each year – however last year we saw click & collect grow by 4.7 percentage points compared with 2014.

While this shows a steadily-increasing trend year-on-year – click & collect sales as a percentage of total online sales for multichannel retailers grew 155% between 2011 and 2015 – the story is more complex when broken down by quarter:

As can be seen, the rise in the percentage of click & collect orders being made is not linear but has tended to fluctuate over the course of each year.

However, in 2015 it appeared to reach a plateau of sorts with very little change in each quarter and reaching an all-time high penetration rate of 23% in Q3.

What the retailers say

In our retailer survey last month (30 respondents) we asked some questions about present usage of click & collect solutions.

It found that just over half of respondents (both multichannel and online-only) currently offer a click & collect service. It is more common among multichannel retailers (with 71% offering this service) compared to around a third of online-only merchants.

Of the multichannel retailers that offer click & collect, a third (33%) offer it both in-store and via third-party collection.

In terms of charging for the service, just over a quarter (27%) of respondents said that they currently do with the costs ranging from £1.95 to £3.95, using various charging thresholds.

Ian Caminsky, CEO of InPost UK: “Click & collect sales have seen overall growth rates as high as 155% since 2011, so it seems surprising that only just over half of all online retailers offer this service. And out of that number, only 33% provide a third-party collection option, which represents a gap in the personal logistics chain that shoppers clearly would like to see filled. For instance, around 36% of shoppers were unsatisfied with their in-store collection experience last Christmas. If retailers offer these shoppers a convenient alternative, such as a fully automated 24/7 parcel locker in a nearby location, they are well set up to increase sales.”

Tim Robinson, CEO, Doddle: “This data is no surprise to us and proves that consumers value a range of convenient locations to pick up online orders. In-store and third party collection are experiencing their greatest share of the delivery market to date. Interestingly, growth in the adoption of click and collect didn’t stop at ‘peak’. In January, Doddle’s collection volumes were 20% higher than November which included the significant sales period leading into Black Friday. There is a cost to retailers for offering a sustainable and fit for purpose click and collect solution: However, aside from the obvious cost savings through consolidation versus home delivery, we’d argue the cost of not offering one is much greater.”

Nick Landon, managing director, Royal Mail Parcels: “A 2015 Triangle study found home delivery (83%) to be the preferred method for online shoppers, with a further 14% of items going to work addresses, just 1.5% going to click & collect in-store and 0.8% to Parcelshops (including post office branches). That said, we do anticipate demand for alternate pick-up points to increase as consumers look for more flexibility and convenience. In-store click & collect is also definitely growing but comes with cost and not yet impacting the overall addressable market growth rate – it tends to impact purchases that would otherwise have been made in-store, rather than delivery traffic. However, various market research studies suggest that both forms are growing fast, albeit from a low base.”

Notes

Definition of click & collect metric – total gross revenue generated through pre-paid web order for collection in store or other drop off points as a percentage of total gross revenue for the quarter (transaction completed online)